Autumn budget 2025 pressure mounts on Rachel Reeves as tax rises loom for Britain

The spotlight is set to fall on Chancellor Rachel Reeves as she delivers the autumn budget on 26 November 2025, a pivotal moment for fiscal policy in the United Kingdom. The government faces formidable challenges, with public borrowing reaching £18 billion in August, the highest in five years, and a deficit outstripping expectations by £11.4 billion in just five months. These developments are intensifying calls for significant tax reforms as ministers seek to balance the books without breaching Labour’s manifesto pledges.

Reeves has repeatedly stated her intention to shield “working people” from increases in income tax, VAT, and national insurance. Despite this, the government is actively considering new measures targeting wealth, property, and sectors that have enjoyed windfall gains in recent years. Policy reforms under discussion include a radical overhaul of the council tax and stamp duty systems, which many argue are outdated and fail to address today’s property market realities. Experts have recommended an annual progressive property tax on homes valued at over £500,000, which could replace both council tax and stamp duty, particularly impacting owners in London and the south-east who have seen rapid rises in their property values.

Further proposals include ending the longstanding capital gains tax exemption for primary residences. Under these plans, higher-rate taxpayers could see a 24 per cent charge applied to gains on property sales, while basic rate taxpayers would pay 18 per cent. This would constitute a marked departure from the current system and could alter the landscape for sellers of high-value homes.

Landlords have emerged as another group in the government’s crosshairs. Policy advisers are backing a new class of national insurance on rental income, starting at 20 per cent with an additional 8 per cent on earnings above £50,270. Such a scheme would significantly reshape the economics of property investment, potentially raising billions for the Treasury but likely drawing the ire of private landlords.

Banks and the financial sector are also bracing for fresh levies. Recent proposals from policy think tanks suggest imposing a windfall tax on profits generated from bank reserves held at the Bank of England, a measure that could raise as much as £8 billion. An increase in the existing bank surcharge to 8 per cent is also under consideration, targeting what are seen as “excess” profits during a period of rising interest rates.

Despite the manifesto commitment on headline income tax rates, Britons are still feeling the effects of frozen tax thresholds, a policy likely to remain in place until 2030. This so-called “fiscal drag” will push more earners into higher tax bands, generating an extra £10 billion as inflation lifts nominal wages. Additional revenue could stem from new taxes on gambling and processed foods, with expectations that a levy on online casinos could contribute more than £3 billion a year to Treasury coffers.

Speculation is rife, but clarity will come only when Reeves stands at the dispatch box in November. With the need to raise up to £30 billion to preserve fiscal credibility, the chancellor appears set to pivot towards measures targeting wealth, property, and specific industries, shaping the economic fortunes of households and businesses across the country.